Forex Signals Brief for June 7th – Tackling A Risk In The Market

Posted Wednesday, June 7, 2017 by
Arslan Butt • 3 min read

Yesterday, in the Asian & New York trading session, the market encountered another wave of volatility as investors increased their positions in anticipation for a trio of risk events scheduled for Thursday. That is why, the U.S. dollar declined to a 7-month low, backtracking over all of its gains since U.S. President Donald Trump's election.

Our forex trading signal on the WTI Crude Oil and EUR/USD closed in profit. Our signal in the precious metal gold, recommended in our update Bullish Channel, Global Uncertainties & Gold – Get Ready To Trade, is still floating in profit. Thereby, it's highly recommended to drag your stop loss at the breakeven point, following the money management strategies. Today, we have very few high impact economic events, so let's have a look at them.

 

Top Economic Events To Watch Today

AUD – GDP q/q (1:30)

GBP – Halifax HPI m/m (7:30)

CAD – Building Permits m/m (12:30)

USD – Crude Oil Inventories (14:30)

JPY – Final GDP q/q (23:50)

 

EUR/USD – The Choppy Trader Currency Pair

On Tuesday, the single currency Euro didn't change a lot against the U.S. dollar. Traders are looking ahead to the European Central Bank (ECB) minimum bid rate decision along with ECB President Mario Draghi's press conference on Thursday.

Yet, the greenback continues to stay low against its peer currencies as the U.S. manufacturing activity in the month of May grew at a slower pace. More importantly, the economy produced far fewer jobs than anticipated according to the figures from the U.S. Bureau of Labor Statistics that were released on Friday.

Forex Trade Signal – Idea

I will sell, only below $1.1280 in order to aim at the $1.1240, while risking until $1.1300.

EURUSD - 30 Min Chart EUR/USD – 30 Min Chart 

 

Technical Outlook – Intraday

We have another ascending triangle pattern in EUR/USD, which can be seen on the hourly chart. The pattern is providing a significant support at $1.1250, along with a resistance at $1.1280.

Don't forget, the triangle pattern always comes with the possibility of a breakout. The same opportunity is waiting for us here, but in my opinion, we need to wait for the actual decision which may come tomorrow.

The momentum indicators are almost neutral with the RSI consolidating above and below 50, demonstrating traders' indecision.

 

USD/JPY – The Pair Looking For Retracement

The Japanese Yen continues to trade higher against the buck. As discussed in, Forex Signals Brief for June 6th report, the USD/JPY traded exactly as per our trade idea and achieved the suggested target in the  New York session on Tuesday.

At the moment, the U.S. dollar is trading at a six-week low against the safe-haven currency, Japanese Yen. The traders are cautious and there are three major reasons for this:

 

  1. U.K General Election
  2. European Central Bank policy decision
  3. FBI Director James Comey Testimony

Forex Trading Signal – Idea

Today, I recommend having a short buy position above $109.350, with a stop loss below $109.100 and a take profit of $109.750.

USDJPY - Hourly Chart

USD/JPY – Hourly Chart

Technical Outlook – Intraday

Technically, the USD/JPY has entered the oversold region, which is can be confirmed by the leading indicator RSI and Stochastic. Both of the indicators are holding in the oversold territory below 30 and 20 respectively.  

Thereby, I expect the pair to retrace a bit before going for additional selling. The pair has the potential to retrace back to 38.2% Fibonacci level of $109.775 and $110.110 which is a 61.8% Fib trading level.

 

Ending Remarks

We don't have much to watch on the economic calendar today. Nevertheless, investors are likely to trade the "risk-off" sentiment today and tomorrow. Hence, keep monitoring the haven assets and try not to get stuck in any major trade ahead of the ECB monetary policy release and UK elections. Good Luck!

 
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About the author

Arslan Butt is our Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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